Switzerland eased away from self-imposed isolation when it joined the United Nations on Sept. 10, 2002, following a referendum in March in which 55% of the electorate voted in favour of UN membership. Pres. Kaspar Villiger and other government members argued that rejection would be disastrous for the country’s international standing and that membership was compatible with Swiss neutrality. An overwhelming majority had voted against UN membership in 1986 out of fears that national sovereignty would be weakened. Switzerland had long been an active member of specialized international agencies such as the World Health Organization, and Geneva served as the UN European headquarters.

Switzerland showed little inclination, however, to follow the 10 other countries accepted for accession negotiations with the European Union. Anti-EU sentiment was heightened as a result of British-led pressure to relax banking secrecy and crack down on tax evasion—which was not an offense in Switzerland. The EU wanted to impose a tax on income earned on savings and investments abroad, which necessitated the introduction of an information-swapping system. Switzerland offered to withhold taxes on interest and dividend payments to EU residents and give it to the EU—but without identifying the depositors. Swiss banks said even that concession would hurt them and warned that abolition of banking secrecy would put 20,000 jobs at risk. Switzerland had earned praise from the U.S. for lifting banking secrecy in the hunt for assets linked to the al-Qaeda terrorist network—although it only found negligible sums.

The government was embarrassed when voters killed its plan to set up a Swiss Solidarity Foundation using “excess” gold. The aim was to invest an expected 20 billion Swiss francs (about $13.5 billion) from the sale of gold reserves and spend the interest, with one-third of the money going to the Swiss social security program, a third to the foundation to help cantonal (state) governments, and a third to people in need at home or abroad. Billionaire industrialist Christoph Blocher, the country’s leading nationalist, slammed the foundation as the product of foreign “blackmail” because it had been conceived in 1997 to calm international accusations that Switzerland had profited from the Holocaust. In the September 22 referendum, 52% voted against the plan, with many saying that, given the international economic climate, it would be better to keep the gold.

Martin Ebner, Switzerland’s best-known financier, was the most prominent victim of the stock-market downturn. In July he was forced to sell the controlling interest in four publicly traded investment companies as part of a restructuring of his debt-laden BZ Group. Lukas Mühlemann, the chairman and chief executive of Credit Suisse Group, the country’s second largest bank, also announced that he would stand down because of its poor performance. Swiss-Swedish engineering conglomerate ABB forced out its chief, Jörgen Centerman, and then witnessed its share price collapse by about 75% in the space of a few days in late October as a result of bankruptcy fears.

The new national airline—swiss—took to the air March 31, combining the services of the defunct Swissair and regional carrier Crossair. Federal and cantonal governments and companies led by Nestlé raised 2.75 billion francs (about $1.7 billion) to get it aloft. Swiss precision was thrown into question after its air traffic controllers admitted to being at least partly to blame for the midair collision of a Russian charter jet and a cargo plane in Swiss airspace over Germany. The crash killed 71 people, many of them school students heading for a beach vacation in Spain. (SeeDisasters.)

In the closest outcome on record, a referendum on November 24 rejected by a majority of just 3,422 votes a proposal by the nationalist Swiss People’s Party to keep out all but a trickle of asylum seekers. The government urged cantonal authorities to do a manual recount to ward off potential legal challenges.

The once-a-generation national exhibition opened in May—a year behind schedule. Split between four lakeside towns, Expo.02 emphasized the avant-garde rather than the traditional. Admissions to the exhibition exceeded 10 million before it closed its doors on October 20.

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